LONDON (Reuters) - Global investors clung to their preference for the tech sector in May, with shares in so-called FAANG and BAT companies remaining the most crowded trade for the fourth straight month, according to a survey by Bank of America Merrill Lynch.

FILE PHOTO: Silhouettes of mobile users are seen next to a screen projection of Facebook logo in this picture illustration taken March 28, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

The bank said on Tuesday that surveyed fund managers found “FAANG + BAT” shares most widely liked by the market and most often held in portfolios. FAANG groups the U.S. tech giants Facebook, Apple, Amazon, Netflix and Google while BAT comprises the Chinese trio of Baidu, Alibaba and Tencent.

Being “short” U.S. Treasury bonds as well as the dollar were also seen as very crowded trades, according to the survey of 233 fund managers managing $643 billion.

Investors saw shorting bank stocks and buying utilities as the best hopes of successfully swimming against the current, picking them as the top contrarian trades.

Overall, investors remained concerned about the global economy as signs multiply that growth is decelerating.

Only a net one percent of the investors thought the global economy will strengthen over the next 12 months, the lowest proportion since February 2016, BAML said.

The survey’s macroeconomic indicator fell into negative territory for the first time since November 2016, while concern about indebtedness was rising: one-third of investors said companies were too levered, the highest proportion since December 2009.

This concern was reflected in profit expectations, which fell to post-Brexit vote lows with just 10 percent of investors expecting faster profit growth over the next 12 months.

Investors also kept relatively high cash holdings in portfolios; while average cash balances edged down to 4.9 percent in May from 5 percent in April, they remained above the 10-year average of 4.5 percent.

However, more than three-quarters of those surveyed thought equities had not yet peaked, with a majority saying the peak would not come until 2019 or beyond.

FILE PHOTO: An iPhone X is seen on a large video screen in the new Apple Visitor Center in Cupertino, California, U.S., November 17, 2017. REUTERS/Elijah Nouvelage/File Photo

A hawkish policy mistake from the Fed or the ECB - i.e. tightening monetary policy too soon or too fast - was considered the biggest risk by investors, taking the top spot from trade war as talks between China and the U.S. progressed.

Asset allocators were watching U.S. Treasury yields, waiting for them to hit 3.6 percent to switch from stocks to bonds.

BANKS AND TECH RULE, ETFS PREFERRED FOR EQUITY EXPOSURE

Banks and technology stocks were the top two most-preferred sectors among global investors. Allocation to bank stocks rose to a net 36 percent overweight this month, the second highest level on record, while investors also added to tech positions.

Allocation to commodities stayed at its highest since 2012. Investors increased their allocations to UK stocks, though the region remains the consensus short among fund managers.

Allocations to emerging market equities saw their biggest drop since November 2016 as investors cut their exposure to the highly dollar-sensitive asset class.

New survey questions on passive investment showed the method of investing is widely used.

Some 53 percent of investors now use exchange-traded funds (ETFs) within portfolios, with an average allocation of one-fifth. Just nine percent of investors are using leveraged ETFs, which imply more risky bets on certain indices.

The index-tracking method of investing is still applied much more to equities than any other asset class, the BAML survey also found.